UK sends positive signal to crypto regulation to become global crypto asset technology hub

In the face of a cryptocurrency market of more than $2 trillion and a trend of increasing popularity around the world, the United Kingdom is sending positive signals and is expected to become the latest country to fully regulate the industry.

This week, the U.K. announced a detailed plan to create a “global crypto-asset technology center,” including a package of measures that will focus on overseeing stablecoins, commissioning the Royal Mint to create NFTs to be issued this summer, and reviewing the tax system.

Stablecoins are a regulatory focus in the UK

Like financial regulators in major economies around the world, the UK has put the regulation of stablecoins on the agenda. John Glen, the UK’s economic secretary to the Treasury, called stablecoins “an area of ​​immediate potential and concern in the cryptocurrency space.”

In a keynote speech at the Innovative Finance Global Summit on April 4, Glen said that the UK will pass legislation to bring some stablecoins into regulation “as part of our ambition to provide a world-leading regulatory regime for stablecoins,” in line with existing regulations. payment frame.

At present, most stablecoins are anchored to legal currency or other assets with stable value. Among them, the current stablecoin with the largest market value, Tether, is pegged to the US dollar.

According to Coin Metrics, the total market capitalization of stablecoins was about $180 billion as of the end of February this year, up from about $38 billion a year ago.

The UK Treasury has yet to confirm which stablecoins will be regulated.

Deng Jianpeng, a professor at the School of Law of the Central University of Finance and Economics, told the Blockchain Daily reporter, “It is natural for stablecoins to be regulated by countries such as the United Kingdom and the United States. On the one hand, stablecoins play a pivotal role in the crypto market, and their growth has a significant impact on the price of cryptocurrencies . big influence. ”

” On the other hand, stablecoins have expanded from pure cryptocurrency investment and financing to other fields, and even issued them as salary payments in the real world. ” Deng Jianpeng added, “In addition, stablecoins mainly run on the blockchain, The flow of funds is difficult to figure out, so there are risks of money laundering and terrorist financing in this gray area.”

At present, senators in the United States have announced their draft bill on stablecoins; the European Central Bank also plans to strengthen the supervision of stablecoins, and it has reportedly asked EU lawmakers to obtain veto powers on private stablecoin projects.

When asked whether the regulation of stablecoins around the world needs to be consistent, Deng Jianpeng believes that “it would be better if they were consistent”, otherwise, once there is a regulatory loophole in a country or region, it is likely to be used for illegal and criminal activities .

The UK wants to become a ‘global hub’ for cryptocurrencies

In his keynote address at the Innovative Finance Global Summit, Glen also said that the Royal Mint has been commissioned to issue NFTs this summer as “symbol of the forward-looking approach we are determined to take.”

In addition to this, the announced measures include a possible re-examination of the UK government’s tax system to “make crypto easier to work”; at the same time, it will also remove the disadvantages of UK fund managers holding cryptocurrencies in their portfolios factor.

In addition, the UK will also establish a high-level crypto-asset group, in conjunction with the UK’s Financial Conduct Authority (FCA) to organize a series of “crypto sprints” to study the legal, technical and regulatory challenges facing the industry, so as to guide the future. The next step in the world of encryption.

Backing up the UK’s determination to create a “global crypto asset hub,” Glen also wants to position the UK as a pro-innovation jurisdiction, enabling the country to attract some “[blockchain] companies that don’t yet have a permanent headquarters.”

However, before this positive signal to the outside world that the United Kingdom supports the development of the encryption field, British regulators have stepped up their scrutiny of the encryption industry.

The U.K. has cracked down on “misleading” crypto-asset advertising since the beginning of this year, with only businesses regulated by the UK’s Financial Conduct Authority (FCA) or the Bank of England being allowed to post their own crypto-asset promotions.

Additionally, cryptocurrency companies operating in the UK must be registered with the FCA in accordance with anti-money laundering regulations. While the FCA has delayed the deadline for cryptocurrency company registrations to June this year and allowed companies to continue trading while seeking full authorisation, some firms have already closed their crypto operations in the UK and moved abroad.

According to Bloomberg, former U.K. Chancellor of the Exchequer Philip Hammond said in January that “the U.K. has fallen behind other financial centers such as the European Union in developing clear regulations for the nascent crypto industry.”

From strict supervision, to the official sending a positive signal for the development of the encryption industry in the UK, Cai Kailong, an expert from the Whale platform think tank and founder of Houlang Finance, said he “doesn’t think the UK is turning.”

Cai Kailong pointed out to the Blockchain Daily reporter that the UK’s regulation of stablecoins and the “regulatory sandbox” system have prerequisites. This includes not harming the interests of investors, complying with KYC (know your customer) and AML (anti-money laundering) rules, and must be guided by the government.

“There are too many gray and black areas in encrypted assets. The government must exclude these before actively promoting it.” Cai Kailong said, “So I don’t think this is a turning point, it is a very natural expression.”

Mixed signals from major economies

Earlier last month, U.S. President Joe Biden signed an executive order titled “Ensuring the Responsible Development of Digital Assets,” requiring the U.S. to maintain a global leadership position in the field of digital assets.

On March 14, MEPs also agreed on draft rules for the regulation, consumer protection and environmental sustainability of crypto assets.

Bitcoin scholar Gu Yanxi previously said in an interview with reporters that the US President’s executive order on digital assets not only affects the development of digital assets in the United States, but also “certainly affects the decision-making of other countries.” Because this digital asset industry is developing very rapidly, it is well known.

He pointed out: “Biden wants to keep the United States at the forefront of this industry, which will further prompt other countries to think more deeply about this and make corresponding decisions.”

On the day Biden signed the executive order, Dubai approved the virtual asset law and established the Dubai Virtual Assets Regulatory Authority.

Cai Kailong pointed out that the mixed “regulatory” signals of the world’s major economies such as the United Kingdom, the United States, and the European Union mean that the trend in the encryption field has become “unstoppable”, so supervision is unavoidable.

“The emergence of regulatory signals is not a bad thing. In the future, more countries will gradually incorporate encrypted assets into the existing regulatory system. This is a necessary condition for the healthy and long-term development of the industry, and it is also a good phenomenon.” He said.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/uk-sends-positive-signal-to-crypto-regulation-to-become-global-crypto-asset-technology-hub/
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